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Archer-Daniels-Midland Co (ADM)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 GAAP EPS was $1.17, up 10% year over year, while adjusted EPS was $1.14, down 16%; revenue was $21.50B, down 6% YoY, and total segment operating profit declined 16% to $1,051M, reflecting weaker crush and biodiesel margins and policy uncertainty .
  • Segment mix: Ag Services & Oilseeds fell 32% YoY to $644M; Carbohydrate Solutions rose 3% to $319M; Nutrition swung to an $88M profit from a $(10)M loss, aided by insurance recoveries and lapping prior nonrecurring headwinds .
  • 2025 guidance: adjusted EPS $4.00–$4.75, corporate costs $1.7–$1.8B, CapEx $1.5–$1.7B, ETR 21–23%; soybean crush margins $45–$55/ton and canola $50–$70/ton; company targets $500–$750M cost savings over 3–5 years and plans a 600–700 role reduction in 2025 .
  • Capital returns and catalysts: quarterly dividend raised 2% to $0.510, extended buyback program (100M shares); near-term stock narrative hinges on biofuel policy clarity (45Z), crush margin normalization in 2H 2025, and execution of cost-saving portfolio actions .

What Went Well and What Went Wrong

What Went Well

  • Nutrition returned to profitability ($88M vs. $(10)M), driven by improved mix, lapping prior-year nonrecurring items, and $46M insurance proceeds; Animal Nutrition margins improved on cost optimization .
  • Strong operational progress: reduced unplanned downtime in North American soy assets, improved crush volumes in December, near-full run rates at Spiritwood; double-digit growth areas in biosolutions and Health & Wellness .
  • Cost discipline: announced targeted actions to deliver $500–$750M savings over 3–5 years, including $200–$300M in 2025 and 600–700 role reductions, emphasizing SG&A control and manufacturing efficiencies .

What Went Wrong

  • Ag Services & Oilseeds (-32% YoY): lower crush execution margins on higher industry run rates, manufacturing costs, and biofuel/trade policy uncertainty; RPO margins compressed on increased pretreatment capacity and UCO imports .
  • Carbohydrate Solutions faced softer EMEA margins and ethanol margin pressure despite robust export demand; ethanol EBITDA expected breakeven near term .
  • Ongoing Decatur East headwinds and specialty ingredients inefficiencies weighed on Human Nutrition; higher insurance premiums and lower texturants pricing persisted .

Financial Results

MetricQ4 2023Q3 2024Q4 2024
Revenue ($USD Billions)$22.98 $19.94 $21.50
Gross Profit ($USD Billions)$1.74 $1.37 $1.36
GAAP Diluted EPS ($)$1.06 $0.04 $1.17
Adjusted Diluted EPS ($)$1.36 $1.09 $1.14
Total Segment Operating Profit ($USD Millions)$1,253 $1,037 $1,051
Segment Operating Profit ($USD Millions)Q4 2023Q4 2024
Ag Services & Oilseeds$954 $644
Carbohydrate Solutions$309 $319
Nutrition$(10) $88
AS&O Subsegments ($USD Millions)Q4 2023Q4 2024
Ag Services$214 $254
Crushing$389 $212
Refined Products & Other$280 $121
Wilmar Equity Earnings$71 $57
Segment Revenues ($USD Billions)Q4 2023Q4 2024
Ag Services & Oilseeds$18.52 $16.87
Carbohydrate Solutions$2.63 $2.75
Nutrition$1.72 $1.77
Total Revenues$22.98 $21.50
KPIs (Volumes, ‘000 MT)Q4 2023Q4 2024
Oilseeds Processed8,841 9,050
Corn Processed4,718 4,708
Total Processed13,559 13,758

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted EPS ($)FY 2025N/A$4.00–$4.75 New
Soybean Crush Execution Margin ($/ton)FY 2025N/A$45–$55 New
Canola Crush Execution Margin ($/ton)FY 2025N/A$50–$70 New
Corporate Costs ($B)FY 2025N/A$1.7–$1.8 New
CapEx ($B)FY 2025~$1.5 (FY24) $1.5–$1.7 Raised vs FY24 midpoint
D&A ($B)FY 2025~1.2 (FY24) ~1.2 Maintained
Effective Tax Rate (%)FY 202520–22 (FY24) 21–23 Raised
Diluted Shares (M)FY 2025~503 (H1 FY24) ~483 Lower (buybacks)
Insurance Recoveries ($M)FY 2025$231 (FY24, incl. reinsurance) ~$60 (60% reinsurance) Lower
RPO Operating ProfitFY 2025N/ASignificantly down vs FY24 Lower
Cost Savings ($M)3–5 yrsN/A$500–$750; $200–$300 in 2025 New
Workforce Reduction (Roles)2025N/A~600–700 New
Dividend ($/share)Q1 2025$0.500 $0.510 Raised
Leverage Ratio (x)FY 2025~2.0 (FY24) ~2.0 Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q4 2024)Trend
Biofuels policy (45Z) & vegetable oil demandElevated uncertainty and margin pressure flagged; board crush weakening late Q4; FY24 guide lowered to $4.50–$5.00 Interim 45Z guidance seen as constructive but pending final; expected shift to higher soybean oil share; 1H margin pressure, 2H improvement outlook Improving clarity 2H; cautious near term
Crush margins & ArgentinaQ3: near-term crush under pressure; Argentina/Brazil high crush rates Execution margins lower YoY; 2025 ranges provided; Argentina export tax revision monitored Lower 1H; potential 2H carry improvement
Cost savings & portfolio simplificationQ3: operational excellence, digital acceleration; potential portfolio actions $500–$750M savings target, $200–$300M in 2025; pipeline ~$2B portfolio opportunities Accelerating
Nutrition recovery & Decatur EastQ3: restart delayed to Q1 2025; specialty ingredients headwinds Q4 profit improved; plant expected back Q2 2025; sequential flat ex-insurance in Q1; Flavors/biotics growing Recovery skewed to H2
Tariffs/macro tradeQ3: China increasing local corn production; trade flows adjust Guidance excludes tariffs; ADM optionality mitigates; watch retaliatory risks Uncertain; managed via footprint
Digitization/automationQ2: plant automation/digitization delivering benefits Broader roll-out targeting manufacturing cost reductions and yields Expanding

Management Commentary

  • “Today, ADM reported fourth quarter adjusted earnings per share of $1.14… Though 2024 presented a variety of challenges, our diligent focus on improving operations has netted positive impact across the network.” — Juan Luciano, CEO .
  • “We anticipate cost actions to deliver in the range of $500 million to $750 million over the next 3 to 5 years with $200 million to $300 million in 2025.” — Juan Luciano .
  • “We expect adjusted earnings per share to be between $4 to $4.75 per share [in 2025]… lower margins in AS&O and Carbsol to create a material headwind… cost out $200–$300 million.” — Monish Patolawala, CFO .
  • “We expect soybean crush execution margins to range from $45 to $55 per tonne… and canola… $50 to $70 per tonne.” — Monish Patolawala .

Q&A Highlights

  • Nutrition cadence: Q1 sequentially flat ex-$46M insurance; recovery expected after Decatur East restart (target Q2 2025) with Flavors/biotics strength and Animal Nutrition margin improvements .
  • Vegetable oil demand and 45Z: soybean oil share seen rising from ~35% to ~40%; interim guidance constructive but final clarity pending; 2H 2025 carry suggests margin improvement .
  • AS&O trajectory: very soft Q1 (down ~50% YoY), self-help and policy clarity set up for stronger 2H; no negative take-or-pay expected in Brazil vs 2024 .
  • Tariffs: guidance excludes tariff impacts; ADM’s global origination/destination footprint provides optionality to re-route trade flows; monitor retaliation risks .
  • Internal controls: continued remediation of material weakness with enhanced design, documentation, and training on intersegment sales; new CAO hired from Cargill .

Estimates Context

  • Wall Street consensus (S&P Global) for Q4 2024 EPS and revenue was not retrievable due to SPGI daily rate limits at the time of this analysis; therefore, comparisons to consensus are unavailable. Values would normally be sourced from S&P Global; consensus data unavailable at time of request.

Key Takeaways for Investors

  • Near-term pressure in AS&O and RPO from biofuel policy uncertainty and UCO imports should ease as 45Z guidance finalizes; management points to 2H margin recovery signals including board crush carry .
  • 2025 framework is conservative with adjusted EPS $4.00–$4.75, reflecting weaker fundamentals offset by $200–$300M cost-out and operational improvements; watch execution on savings .
  • Nutrition’s turnaround is progressing; expect flatter Q1 ex-insurance and a stronger H2 as Decatur East restarts and Flavors/biotics growth continues; specialty ingredients costs remain a watch item .
  • Capital allocation remains shareholder-friendly (dividend increase, extended buyback program) while maintaining ~2x leverage; discipline in CapEx and portfolio simplification should support ROIC .
  • Segment mix: Carbohydrate Solutions resilience (North America S&S strength) offers ballast amid AS&O volatility; ethanol margins breakeven near term but export demand supports volumes .
  • Key catalysts: final 45Z guidance, tariff decisions (U.S./Canada/China), Argentina export tax evolution, and timing of insurance recoveries in 2025 .
  • Risk factors: prolonged policy uncertainty, margin compression from elevated global crush, specialty ingredients inefficiencies, and higher legal/SG&A costs; offset by automation/digitization and portfolio actions .